Don't Look Now, But Facebook's Stock Is Up 20% In 2 Weeks!

Remember two weeks ago, when Facebook's stock had crashed all the
way to ~$25?

Yes, back then, everyone was absolutely certain that it
was going to, say, $18, and they were telling everyone who would
listen about that.

Well, you don't hear from those folks much anymore.

Why not?

Because Facebook's stock has bounced off the bottom like Flubber
and has now soared back to $31.50.

Why is Facebook headed north all of a sudden?

Here's my theory:

All the people who bought the IPO expecting a near-term pop have
finally blown out of the stock in disgust. And all of the people
who are actually interested in investing in Facebook for the long
haul--the folks who should have bought the IPO--have
quietly been working their way in.

And some shorter-term investors have intelligently reasoned that
Facebook is not run by idiots and, therefore, that Facebook will
likely have built a lot of padding into the Q2 "estimates" it
gave Wall Street analysts prior to the IPO. The odds that
Facebook will "surprise on the upside" when it reports its Q2
results, therefore, are good.

And then, of course, all the underwriter analysts are probably
putting the finishing touches on their "BACK UP THE TRUCK!"
reports, which should be released toward the end of this month.
And the analysts will have a bunch of good reasons why Facebook
is a great investment at this price--a huge discount to the IPO
price--and that it's a "must-own" for any self-respecting growth
investor.

(When the Q2 results hit, of course, all bets are off. If they
don't truly surprise on the upside--as in, surprise hedge funds,
not those who regard "consensus" as the real
expectation--Facebook could head for the tank again. After all,
the company now has a valuation of almost $90 billion
again. And it's trading at about 40X an aggressive estimate
for 2013 earnings of $0.80).